Ever since the international financial crisis eased for the first time those with wealth have been getting as much of that wealth out of cash and into something safer as fast as they possibly can.
First came the gold rush, but as the price of gold soared higher and higher it began to lose its appeal. During this time property prices in almost every country in the world had been falling. The key word being almost; for the locations where property prices were holding firm became the next safe-haven for the world’s wealth.
These locations were almost all pricier locations, where prime real estate was holding its value. This is because these properties have long been bought by only the wealthiest buyers, who are rarely forced into accepting a lower price for a quick sale, so — as property prices are determined by sale prices in the same area — prices in these areas tend to hold their value against financial shocks. As you’d expect many Caribbean locations fit into this box.
We can certainly count St Kits and Nevis among the list of Caribbean safe havens. As a result of real estate in St Kitts having held its value against the downturn, sales to buyers from around the world have been growing steadily since mid-2009.
Caribbean real estate is mostly at the higher end of the price scale, so the predominantly wealthy owners were not forced to sell up at a loss. Likewise, agents and developers have never needed nor expected to sell in volume; they make off one sale what their Bulgarian counterpart would have to sell thirty properties to make, and so they are rarely compelled to drastically cut prices either. As a result, while there were reports of some developers cutting off non-essential extras in order to lower prices, there was no depreciation in real terms.
Like the other Caribbean safe-havens, St Kitts property became attractive not only because it was a safer asset than cash in the current climate, but also because the financial shock was a depression, and the wealthy were buying in the Caribbean as a treat to cheer themselves up, at least subconsciously anyway.
St Lucia, Barbados, Grenada and Trinidad and Tobago also became popular as safe-havens, but St Kitts and Nevis had an ace up their sleeve to make them even more appealing to wealthy buyers.
Namely, an economic citizenship program that saw buyers of property costing $350k or more granted citizenship and a slew of tax benefits to go with. Tax benefits include no world income taxation, no personal tax, no restriction on the repatriation of profits and imported capital, no inheritance tax, no withholding tax for nationals living abroad and no tax credits.
Understandably, the tax benefits combined with the safety of real estate in St Kitts as an asset has led to a great recovery in sales over the last 18 months.